Is it time for some energy-driven inflation? Will an energy sector recovery become new driver of bull market to relieve FANG stocks? WTI has broken decisively above 3-year high, XLE is at decade long support, there is a bullish expansion over March and XLE is 5-day best performer among S&P500 sectors.

A look at simple price action indication of change of trend: price expansion. A bearish price expansion terminates an uptrend sequence of higher highs, higher lows while a bullish price action does the opposite. Making a trade entry after such a signal ensures that we got the trend and timing correct.

A big bearish setup we spotted in EURNZD back in January appears to be now in play. An anticipated Head and Shoulders reversal did not complete but since transformed. However the key feature which is a resistance going back to 2005 remains intact. A trendline break and bearish expansion sends a signal.

XLP retains it’s status as a leading bear sector in the US market. At the moment, moving averages, price action and chart pattern paint a bearish reversal setup. 1) Moving average dead cross. 2) Bearish expansion in January terminates last 4 quarters of higher lows. 3) Fallen out of equidistant channel.

ECB Monetary Policy Meeting this Thursday could provide the driver to push EURGBP into a move with conviction. If not, then how the pair closes by end of January should provide a clue for February. This zone is a significant support coming to five months.